Hosts of Controversy: Airbnb's Role in Urban Socioeconomic Change

Abstract

In this thesis, I examine the role of Airbnb in urban socioeconomic change across New York City's five boroughs and San Francisco County. Although Airbnb's impact on its local communities often draws heavy criticism from housing and urban development policy, the current body of literature remains inconclusive. My investigation employs an empirical cross-sectional analysis that draws upon a neighborhood change index methodology utilized by the Los Angeles Mayor's Innovation Team to quantify an area's socioeconomic composition based on income, rents, and educational status. Using publicly available American Community Survey and AirDNA data sets, I account for different Airbnb density configurations based on (1) active and inactive listings and (2) various housing stock classifications. My analysis finds that there is a statistically significant negative relationship between Airbnb density and urban socioeconomic change on both absolute and relative scales, therefore exposing incumbent residents to displacement risk. This is a salient finding because it deviates from that found in existing literature and provides supporting evidence for Airbnb's claims that it is beneficial for its hosting neighborhoods. The implications of this paper extend more holsitically to public policy and gentrification literature because my approach uses an aggregated index as opposed to singular macroeconomic measurements. Thus, I offer a shift in the narrative from one of systematic displacement to one of financial opportunity and support.